My Lords, I think that I should declare an interest—perhaps I should have done so sooner. I am currently chairman of the constituency Labour Party and was for many years treasurer of a constituency Labour Party, but I am glad to say that I gave that up well before 2000.
This has been a lively, interesting and well informed debate. There is fantastic expertise in this House on these subjects and the Government are grateful to noble Lords for their contributions. However, I feel that the Bill is in a rather unusual and unfair position as it has been attacked for not being something that it has never pretended to be. It is not the final answer to what has been described as the democratic deficit in this country. That is not this Bill at all. It has a more modest intention; it represents a significant attempt to make important improvements where we can, by agreement. My noble friend Lord Clinton-Davis said that to him it represents an advance. That is what it is supposed to be. It is not the final answer to all these issues. It is particularly an advance, we hope, towards a system of party funding that is, first, more transparent and, secondly, better regulated.
It is in the interests of all parties for the regulations governing party finance and expenditure to be strengthened and for the public to have faith in the democratic process. We have heard interesting comments on all sides about what noble Lords consider to be the democratic state of the nation. We believe that all this can happen only through a consensual approach. These are not matters that can best be decided by partisan politics. The Government's commitment to move forward on the basis of broad consensus is reflected in the Bill. That does not mean agreeing about everything but is about not doing something that is so out of tune that it is fundamentally opposed. I repeat that the Government are in listening mode to representations as the Bill proceeds, and I suspect that there will be broad support for many of its aspects.
Noble Lords have raised important matters and I look forward to debating them in Grand Committee. In advance, I shall try to deal with some of them now, but I am setting myself a strict time limit because I know that my noble friend beside me will do it if I do not. I start with the issue of donation caps, which is very attractive to noble Lords on all sides of the Chamber, and I can understand why. It is important to go back to Sir Hayden Phillips on this point. To implement a cap without introducing greater state funding would result in major financial instability for political parties. He is right about that because it would impose significant restrictions on parties' freedoms to raise their own funds, and an increase in public funding would be needed to offset the effect of a cap on donations. In other words, his view was that without increased state funding, it was not necessarily right to impose a donation cap. As we have made clear, such fundamental reform of the current party funding regime would need to command cross-party consensus and the confidence of the public. Frankly these conditions do not currently exist.
The noble Lord, Lord Rennard, made an interesting point—all his points are very interesting—about spending limits starting each year. We do not believe that it is possible to reach consensus on any more fundamental reforms at present. In its limited way, the Bill represents quite a step forward and has broad cross-party consensus. On raising recordable thresholds, as has been referred to from the start of this Second Reading debate, there are differences of opinion. Some believe that we should not raise the threshold at all; others that we should raise it by a little; one or two may even agree with the Government that moving from £200 to £500 is right; but others think that it should be more than that. Let us see how our debates go. The Government's view is that we have it right.
The interesting point is what we should do in the future. The noble Lord, Lord Henley, had an interesting idea, which may find some support. It would require the Government to review these thresholds once during the life of each Parliament. We want to consider that proposal and perhaps come back to it at a later stage.